We had one of those "dog safe" heating pads in the dog bed under blankets for over a year now and one dog would lay on top the blankets and the other dog, Cruz, liked going under the blankets and laying directly on the pad. The instructions said to not let them lay directly on it, but since it said it was "dog safe" and he didn't seem bothered by it, we stopped moving him.
After months of this we noticed a small bald patch. He gets allergies and will sometimes pull out hair, so we didn't think much of it. 2 days later and it had grown. Another day later, the skin was turning necrotic and smelled so he went in to the vet. Initially they thought it might be an infected bite, but upon further inspection and consultation with other vets in the office, it was determined to be a very bad burn.
They got him in to surgery right away to remove the rotten flesh and they said the fatty layer underneath was completely cooked through. We had to bring him in for wound dressing daily for over a week and then 3 times a week for 2 weeks and now he's at a point that we can change the gauze ourselves until it finishes closing up.
So it seems that even though the heating pad was maxed at 120°F, over the long term it was enough to very slowly "cook" him. We know it's our fault for letting him lay directly on it, and we feel terrible, so I just wanted to hopefully help anybody else avoid our mistake.